Employment pension for woman after 60

Lincsdebt

I have a (small) personal pension from a previous employer's final salary scheme, which I took in my late 50s. I was 60 last year and it went up by only about £1 a month, having previously increased by around 5%.

I called up and asked why, to be told, "it's because you are now getting a State Pension". I pointed out that I am not now entitled to this until I am 66, so my situation was no different from last year but they said that was the way it is. This year the increase was 17p a month after tax (I am still employed elsewhere thankfully). My husband also has a pension from the same scheme, he is 62. His increase this year was 6%.

Please can anyone here can explain to me in layman's terms why this inequality between the sexes exists in employment pensions?

kidmugsy

Lincsdebt wrote: »

Please can anyone here can explain to me in layman's terms why this inequality between the sexes exists in employment pensions?

Probably because that's what the rules were. Why did women get State Pension at 60 and men at 65? The way the rules were.

Come to that, women surely should get smaller pensions than men, because women tend to live longer. I blame God.

xylophone

It is very probable that your DB pension scheme was contracted out.

If you were in the scheme between 1978 and 1997, part of your pension will be a GMP- (Guaranteed Minimum Pension). Your scheme has to pay you at least your GMP at age 60 (women) and age 65 (men).

You brought your pension into payment before age 60 and the whole of the pension (which included the GMP) increased in payment in line with the rules of your scheme.

When you became 60 (which is still GMP age for women as 65 is still GMP age for men, despite the increase in state pension age) your pension administrator will have split your pension into pre 88 GMP, post 88 GMP and any excess over the two.

Your scheme has no obligation to pay any increase on the pre 88 GMP, and only up to 3% on post 88 GMP with the balance increasing according to scheme rules.

Under the GMP arrangements, it would originally have been expected that the state would index link the pre 88 GMP and anything over the post 88 GMP through the state pension. That said, this might not have happened when a person had a deferred DB pension where the GMP revalued in deferment by Fixed Rate, so making the GMP (known as COD in state pension terms) far higher than the pre 97 Additional State Pension he/she would have earned had he been contracted in.

However, as noted above, while GMP age did not change, State Pension Age did.

This meant that for women in your position, they received no index linking on pre 88 GMP from the state or the scheme, and only up to 3% from the scheme until they reached their later SPA.

Some schemes (notably in the public sector) agreed to carry on increasing the whole of the scheme pension until the later SPA, but there was no obligation for them so to do.

You will receive your SP under the new single tier scheme in which the index linking described above has been abolished.

Therefore you will never (short of a change in scheme rules) receive any index linking on the pre 88 portion of your scheme pension or anything over 3% on the 88-97 portion.

Have you obtained a new state pension forecast?

https://www.gov.uk/check-state-pension

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf

xylophone

http://www.thisismoney.co.uk/money/pensions/article-2701873/EXCLUSIVE-Secret-loophole-freezes-pensions-250-000-women.html

The subject was covered in this article a couple of years ago.

Lincsdebt

Thank you Xylophone, I can understand why this is. I haven't got a pension forecast, I will do that, though I expect to be disappointed!


When I started the job from which I have this pension, I could retire at 60. I'm actually 65 before the rules change but have to work till 66.


I know it's all in the cause of equality, but what's equal about women working six more years and men just one?

Daniel54

Lincsdebt wrote: »

I know it's all in the cause of equality, but what's equal about women working six more years and men just one?

It's so that a woman born the same day as me will reach SPA on the same day as me.

dunstonh

I know it's all in the cause of equality, but what's equal about women working six more years and men just one?

What about men having to work 6 years longer than women despite having a lower life expectancy. What is equal about that?

Plus, that increase for 60 to 65 was announced over 20 years ago. The more recent increase from 65 to 66 and 67 is not 6 years.

Seems you want equality except when it you lose out from it.

mgdavid

Lincsdebt wrote: »

I know it's all in the cause of equality, but what's equal about women working six more years and men just one?

!!!!!!.
to correct a previous inequality which women have got away with for far too long.

missbiggles1

Lincsdebt wrote: »

Thank you Xylophone, I can understand why this is. I haven't got a pension forecast, I will do that, though I expect to be disappointed!


When I started the job from which I have this pension, I could retire at 60. I'm actually 65 before the rules change but have to work till 66.


I know it's all in the cause of equality, but what's equal about women working six more years and men just one?

Now, that's an unusual twist on the situation!

bigadaj

I would normally have no sympathy for the waspi type argument but the OP does seem to have a case for some complaint, given the direct comparison with her husband.

Life can be unfair and people have to accept that but at least there seems some justification in this particular complaint.

JezR

Schemes had the ability to attempt to equalise provision in some way but it was not uncommon not to as too difficult.